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Public Forum: Time to live within our means

Lately there has been much wailing and gnashing of teeth over the bonuses paid at AIG. Big deal. Have we forgotten about the $3.6 billion in bonuses that Merrill Lynch paid out just hours before the deal to be bought by Bank of America was to close? AIG's bonuses are less than 5 percent of Merrill's. $165 million nowadays is chump change. Let's get back to working on fixing the problem.

Distasteful as it is, the bonuses were legal. If we don't like the laws then our elected legislators should thoughtfully change them. If they don't, we can change the legislators.

We are now working on laws to allow the government to take over failing financial institutions (not just banks). This is reactive. Laws are needed to prevent companies becoming so big that they pose a systemic risk to our financial system in the first place. Financial instruments like derivatives and others need to be regulated like securities, which also need better regulation or more competent enforcement of existing laws. If companies then fail, existing bankruptcy laws can apply.

Existing credit card company practices make it exceptionally difficult for people in credit trouble to get out. The credit card industry needs reforms to protect consumers. Here are some ideas. All terms and conditions must be printed on 8½-by-11-inch paper in 10-point font so people can actually read them. It should not be legal to charge interest on money that is no longer owed as rolling two-month average daily balance calculations do. Conditions that will cause an interest rate change should be explicitly listed. Sufficient advance notice of an interest rate change must be given. Interest rates should not be allowed to become usurious. The grace period to pay must allow sufficient time for payment.

People must also assume responsibility for their credit card use. If people don't have money to pay for something up front, they certainly won't have money to pay for it at 30 percent interest. We need to stop financing our lifestyles and live within our means.